Bulgarian central bank sets extra risk buffers for 11 lenders

First Investment Bank AD

01/12/2017 16:07

SOFIA, Dec 1 (Reuters) - Bulgaria's central bank said on 
Friday that 11 of the Balkan country's 22 commercial banks which 
it regards as systemically important would have to adopt extra 
risk buffers. 
    The central bank said the Bulgarian banks, 70 percent of 
which are owned by European Union lenders, would require 
additional buffers of between 0.125 percent and 0.5 percent of 
total risk exposure as of January next year. 
    The banks are well capitalised and the new rules are not 
expected to prompt the raising of additional capital.  
    Two of the country's largest lenders, UniCredit Bulbank 
 CRDI.MI  and locally-owned First Investment Bank  5F4.BB  will 
have to adopt additional capital buffers of 0.5 percent as of 
January 1, the central bank said.      
     Another seven lenders, including DSK Bank, controlled by 
Hungary's OTP  OTPB.BU  as well as the units of Societe Generale 
 SOGN.PA  and KBC  KBC.BR  will have to have additional capital 
buffers of 0.25 percent as of next year. Two other banks will 
have to add capital buffers of 0.125 percent. 
    The buffers for systemically important institutions are 
planned to gradually increase to 0.5 percent and 1.0 percent by 
2020.     
    The central bank said it will maintain its systemic risk 
buffer at 3 percent for all banks. It has also introduced a 
capital conservation buffer of 2.5 percent for lenders since 
2014 and keeps the counter-cyclical capital buffer at 0 percent. 
    The average Common Equity Tier 1 ratio of the banking system 
stood at 20.5 percent at the end of September, central bank data 
showed, above the total capital requirements of 10 percent. 
 
 (Reporting by Tsvetelia Tsolova; editing by Alexander Smith) 
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;)) 
 
Keywords: BULGARIA CENBANK/CAPITAL